Dow 50,000 within reach, investor says

A money manager who invests in undervalued stocks is calling for the bull market to run another three to five years and for the Dow to reach 50,000 before the good times end on Wall Street.

The bullish call may sound like a long shot. The Dow Jones industrial average would need to double from Tuesday’s close of 24,835, which equates to an annual gain of more than 14% if the Dow 50k milestone is hit in five years and around 20% if it takes four years.

But the man behind the optimistic prediction, Charles Lemonides, founder and chief investment officer at ValueWorks, a New York-based money management firm that runs a hedge fund, says investors “should build their portfolios recognizing Dow 50,000 is a real possibility” by 2022 or 2023.

“It’s not crazy,” he tells USA TODAY. So how does Lemonides think the Dow gets from here to there?

Investor enthusiasm for stocks will swell, he says, and the market will be led higher by a narrow group of stocks, such as the dot.com stocks in 2000 and Nifty Fifty blue-chip names in the 1960s that become wildly expensive. The next leg up could be driven by blockchain technology, biotech breakthroughs, artificial intelligence or virtual reality.

“Whatever you posit what it could be sounds like science fiction,” he says. The economy, he adds, will chug along for years, helped by cheap money still sloshing around the globe and pent-up demand.

The risk now is investors being out of the market. The risk later, he warns, will be investors piling in at the top in pursuit of gains they never saw coming.